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The Advertiser
25-05-2025
- Politics
- The Advertiser
The stakes are high when it comes to super scams
It was a quiet Friday - until my inbox exploded. A distressed reader had just seen what she thought was a government announcement: from 1 June 2025, nobody would be allowed to touch their super until age 70. She was shocked and panicky. It was all news to me, so I asked her to send a screenshot. What came back looked highly convincing. It was a professional-looking Apple News article featuring a photo of the prime minister, complete with quotes and policy details. It claimed the preservation age was being lifted to 70 and promised a "work bonus" to soften the blow. I told her it screamed fake news, and I was right. But within hours, dozens more emails flooded in from readers who had seen the same article and were equally alarmed. That's when I called the Tax Office. They confirmed what I suspected: it was total rubbish. We immediately issued a special bulletin to all my news subscribers to warn them it was a fake. This is AI and social media being weaponised. A few clicks, and boom - scammers whip up a fake news release so real it fools half the country. They blast it out on email or Facebook, and their goal's dead simple: get you to click. One wrong move, and your device is toast, your data's swiped, or your identity's gone. These scams aren't just dodgy texts anymore: they're polished, gut-punching lies built to spark fear and chaos. And when it comes to superannuation - one of your most important assets - the stakes are high. Let's be absolutely clear: any major changes to superannuation rules, such as lifting the preservation age, would be front-page news. They'd be announced through formal channels, usually as part of the Federal Budget, and covered extensively in mainstream media. If you haven't seen it on the evening news or read it in a major newspaper, chances are it isn't real. Here are the facts. The preservation age is currently 60, and there are no plans to increase it. Once you reach preservation age, you can access your super if you meet a "condition of release". That typically means retiring or ceasing employment - though it doesn't have to be from your main job. Even resigning from a casual job may be enough. And if you're 60 or older and can't satisfy a condition of release, you can start a transition-to-retirement (TTR) pension, which allows you to draw up to 10 per cent of your super annually, even while still working. It's a useful strategy for those wanting to cut back their hours without sacrificing income. From age 65, you can access your super regardless of your work status. For people on temporary visas, the Departing Australia Superannuation Payment (DASP) scheme allows you to withdraw your super once you've left the country permanently. In limited cases, you can access super before preservation age: for example, if you're permanently incapacitated, terminally ill, suffering severe financial hardship, or facing large medical bills. Each situation has strict eligibility rules and requires approval from the ATO or your super fund. Super is a long-term investment. But it's also a tempting target for scammers, because it's where most Australians keep a large chunk of their retirement wealth. That's why you need to stay vigilant, question what you see online, and never act on anonymous messages without checking first. If something sounds extreme or sudden - like moving the preservation age to 70 overnight - don't panic. Don't click. Don't forward it. Just check with a reputable source like your fund, a licensed adviser, or government websites. A moment of doubt can save you a lifetime of trouble. Question: We own our own home valued at around $1,300,000 although we have an investment loan against the home equity, of $400,000. I have not paid this out as my investment return has to date exceeded the interest payable on the interest only loan. Does Centrelink deduct the value of the investment loan when calculating asset value to determine eligibility? Answer: It depends on how the loan is secured. If the mortgage is over your residence, the loan will not be deducted from the asset value - but if the loan is secured over the investment itself Centrelink will reduce the investment asset by the amount of that loan. Question: How will my superannuation be taxed when it passes to my daughters after my death? It is in pension mode, and all withdrawals are tax-free. When my daughters inherit their equal shares, will they be required to pay tax, or does its tax-free status continue? If tax is payable, would it be more beneficial to name my wife as the beneficiary so she can later transfer the funds to them? What effect would this have on her pension? Answer: If you pass away while in pension phase, your super pension will cease, and your daughters can only receive the remaining balance as a lump sum. Whilst withdrawals you make are tax-free, the taxable proportion of lump sum death benefits paid to your daughters (non-tax dependants) will be subject to tax at 15% plus 2% Medicare Levy. If you changed the beneficiaries from your daughters to your wife, then she can receive a tax-free lump sum death benefit. However, the amount received by your wife will be assessed as an asset by Centrelink and assuming she keeps the funds in the bank account, deemed income will count under the income test. This may affect her age pension. Furthermore, if she then gifted this amount to your daughters, Centrelink will treat the amount gifted, less the first $10,000, as a 'deprived' asset, and count it under the means tests for 5 years. This is a complex issue and expert advice is essential. Question: I am 67 and retired from my banking career after 48 years. I now do handyman work to stay active, which I enjoy. It's not full-time - about 10 hours per week. I also spend 10 hours weekly at a paid woodworking course. I'm self-employed but not incorporated or registered (no ABN/ACN). I issue invoices for all my jobs. I've tried seeking clarification from the ATO and my super fund without success. If I'm self-employed, what evidence must I provide to the ATO/super fund to contribute to super and claim a tax deduction for concessional contributions? I wish to contribute the $30,000 maximum. Answer: An ATO spokesperson says the work test requires proof of gainful employment for at least 40 hours within 30 consecutive days, as an employee or self-employed, in the financial year of contribution. Australia's tax system relies on self-assessment, assuming your information is accurate. If reviewed and you lack evidence for a deduction, your claim may be disallowed. Keep records of your work hours to demonstrate compliance. You seem on the right track. Getting an ABN might be wise - it's free. It was a quiet Friday - until my inbox exploded. A distressed reader had just seen what she thought was a government announcement: from 1 June 2025, nobody would be allowed to touch their super until age 70. She was shocked and panicky. It was all news to me, so I asked her to send a screenshot. What came back looked highly convincing. It was a professional-looking Apple News article featuring a photo of the prime minister, complete with quotes and policy details. It claimed the preservation age was being lifted to 70 and promised a "work bonus" to soften the blow. I told her it screamed fake news, and I was right. But within hours, dozens more emails flooded in from readers who had seen the same article and were equally alarmed. That's when I called the Tax Office. They confirmed what I suspected: it was total rubbish. We immediately issued a special bulletin to all my news subscribers to warn them it was a fake. This is AI and social media being weaponised. A few clicks, and boom - scammers whip up a fake news release so real it fools half the country. They blast it out on email or Facebook, and their goal's dead simple: get you to click. One wrong move, and your device is toast, your data's swiped, or your identity's gone. These scams aren't just dodgy texts anymore: they're polished, gut-punching lies built to spark fear and chaos. And when it comes to superannuation - one of your most important assets - the stakes are high. Let's be absolutely clear: any major changes to superannuation rules, such as lifting the preservation age, would be front-page news. They'd be announced through formal channels, usually as part of the Federal Budget, and covered extensively in mainstream media. If you haven't seen it on the evening news or read it in a major newspaper, chances are it isn't real. Here are the facts. The preservation age is currently 60, and there are no plans to increase it. Once you reach preservation age, you can access your super if you meet a "condition of release". That typically means retiring or ceasing employment - though it doesn't have to be from your main job. Even resigning from a casual job may be enough. And if you're 60 or older and can't satisfy a condition of release, you can start a transition-to-retirement (TTR) pension, which allows you to draw up to 10 per cent of your super annually, even while still working. It's a useful strategy for those wanting to cut back their hours without sacrificing income. From age 65, you can access your super regardless of your work status. For people on temporary visas, the Departing Australia Superannuation Payment (DASP) scheme allows you to withdraw your super once you've left the country permanently. In limited cases, you can access super before preservation age: for example, if you're permanently incapacitated, terminally ill, suffering severe financial hardship, or facing large medical bills. Each situation has strict eligibility rules and requires approval from the ATO or your super fund. Super is a long-term investment. But it's also a tempting target for scammers, because it's where most Australians keep a large chunk of their retirement wealth. That's why you need to stay vigilant, question what you see online, and never act on anonymous messages without checking first. If something sounds extreme or sudden - like moving the preservation age to 70 overnight - don't panic. Don't click. Don't forward it. Just check with a reputable source like your fund, a licensed adviser, or government websites. A moment of doubt can save you a lifetime of trouble. Question: We own our own home valued at around $1,300,000 although we have an investment loan against the home equity, of $400,000. I have not paid this out as my investment return has to date exceeded the interest payable on the interest only loan. Does Centrelink deduct the value of the investment loan when calculating asset value to determine eligibility? Answer: It depends on how the loan is secured. If the mortgage is over your residence, the loan will not be deducted from the asset value - but if the loan is secured over the investment itself Centrelink will reduce the investment asset by the amount of that loan. Question: How will my superannuation be taxed when it passes to my daughters after my death? It is in pension mode, and all withdrawals are tax-free. When my daughters inherit their equal shares, will they be required to pay tax, or does its tax-free status continue? If tax is payable, would it be more beneficial to name my wife as the beneficiary so she can later transfer the funds to them? What effect would this have on her pension? Answer: If you pass away while in pension phase, your super pension will cease, and your daughters can only receive the remaining balance as a lump sum. Whilst withdrawals you make are tax-free, the taxable proportion of lump sum death benefits paid to your daughters (non-tax dependants) will be subject to tax at 15% plus 2% Medicare Levy. If you changed the beneficiaries from your daughters to your wife, then she can receive a tax-free lump sum death benefit. However, the amount received by your wife will be assessed as an asset by Centrelink and assuming she keeps the funds in the bank account, deemed income will count under the income test. This may affect her age pension. Furthermore, if she then gifted this amount to your daughters, Centrelink will treat the amount gifted, less the first $10,000, as a 'deprived' asset, and count it under the means tests for 5 years. This is a complex issue and expert advice is essential. Question: I am 67 and retired from my banking career after 48 years. I now do handyman work to stay active, which I enjoy. It's not full-time - about 10 hours per week. I also spend 10 hours weekly at a paid woodworking course. I'm self-employed but not incorporated or registered (no ABN/ACN). I issue invoices for all my jobs. I've tried seeking clarification from the ATO and my super fund without success. If I'm self-employed, what evidence must I provide to the ATO/super fund to contribute to super and claim a tax deduction for concessional contributions? I wish to contribute the $30,000 maximum. Answer: An ATO spokesperson says the work test requires proof of gainful employment for at least 40 hours within 30 consecutive days, as an employee or self-employed, in the financial year of contribution. Australia's tax system relies on self-assessment, assuming your information is accurate. If reviewed and you lack evidence for a deduction, your claim may be disallowed. Keep records of your work hours to demonstrate compliance. You seem on the right track. Getting an ABN might be wise - it's free. It was a quiet Friday - until my inbox exploded. A distressed reader had just seen what she thought was a government announcement: from 1 June 2025, nobody would be allowed to touch their super until age 70. She was shocked and panicky. It was all news to me, so I asked her to send a screenshot. What came back looked highly convincing. It was a professional-looking Apple News article featuring a photo of the prime minister, complete with quotes and policy details. It claimed the preservation age was being lifted to 70 and promised a "work bonus" to soften the blow. I told her it screamed fake news, and I was right. But within hours, dozens more emails flooded in from readers who had seen the same article and were equally alarmed. That's when I called the Tax Office. They confirmed what I suspected: it was total rubbish. We immediately issued a special bulletin to all my news subscribers to warn them it was a fake. This is AI and social media being weaponised. A few clicks, and boom - scammers whip up a fake news release so real it fools half the country. They blast it out on email or Facebook, and their goal's dead simple: get you to click. One wrong move, and your device is toast, your data's swiped, or your identity's gone. These scams aren't just dodgy texts anymore: they're polished, gut-punching lies built to spark fear and chaos. And when it comes to superannuation - one of your most important assets - the stakes are high. Let's be absolutely clear: any major changes to superannuation rules, such as lifting the preservation age, would be front-page news. They'd be announced through formal channels, usually as part of the Federal Budget, and covered extensively in mainstream media. If you haven't seen it on the evening news or read it in a major newspaper, chances are it isn't real. Here are the facts. The preservation age is currently 60, and there are no plans to increase it. Once you reach preservation age, you can access your super if you meet a "condition of release". That typically means retiring or ceasing employment - though it doesn't have to be from your main job. Even resigning from a casual job may be enough. And if you're 60 or older and can't satisfy a condition of release, you can start a transition-to-retirement (TTR) pension, which allows you to draw up to 10 per cent of your super annually, even while still working. It's a useful strategy for those wanting to cut back their hours without sacrificing income. From age 65, you can access your super regardless of your work status. For people on temporary visas, the Departing Australia Superannuation Payment (DASP) scheme allows you to withdraw your super once you've left the country permanently. In limited cases, you can access super before preservation age: for example, if you're permanently incapacitated, terminally ill, suffering severe financial hardship, or facing large medical bills. Each situation has strict eligibility rules and requires approval from the ATO or your super fund. Super is a long-term investment. But it's also a tempting target for scammers, because it's where most Australians keep a large chunk of their retirement wealth. That's why you need to stay vigilant, question what you see online, and never act on anonymous messages without checking first. If something sounds extreme or sudden - like moving the preservation age to 70 overnight - don't panic. Don't click. Don't forward it. Just check with a reputable source like your fund, a licensed adviser, or government websites. A moment of doubt can save you a lifetime of trouble. Question: We own our own home valued at around $1,300,000 although we have an investment loan against the home equity, of $400,000. I have not paid this out as my investment return has to date exceeded the interest payable on the interest only loan. Does Centrelink deduct the value of the investment loan when calculating asset value to determine eligibility? Answer: It depends on how the loan is secured. If the mortgage is over your residence, the loan will not be deducted from the asset value - but if the loan is secured over the investment itself Centrelink will reduce the investment asset by the amount of that loan. Question: How will my superannuation be taxed when it passes to my daughters after my death? It is in pension mode, and all withdrawals are tax-free. When my daughters inherit their equal shares, will they be required to pay tax, or does its tax-free status continue? If tax is payable, would it be more beneficial to name my wife as the beneficiary so she can later transfer the funds to them? What effect would this have on her pension? Answer: If you pass away while in pension phase, your super pension will cease, and your daughters can only receive the remaining balance as a lump sum. Whilst withdrawals you make are tax-free, the taxable proportion of lump sum death benefits paid to your daughters (non-tax dependants) will be subject to tax at 15% plus 2% Medicare Levy. If you changed the beneficiaries from your daughters to your wife, then she can receive a tax-free lump sum death benefit. However, the amount received by your wife will be assessed as an asset by Centrelink and assuming she keeps the funds in the bank account, deemed income will count under the income test. This may affect her age pension. Furthermore, if she then gifted this amount to your daughters, Centrelink will treat the amount gifted, less the first $10,000, as a 'deprived' asset, and count it under the means tests for 5 years. This is a complex issue and expert advice is essential. Question: I am 67 and retired from my banking career after 48 years. I now do handyman work to stay active, which I enjoy. It's not full-time - about 10 hours per week. I also spend 10 hours weekly at a paid woodworking course. I'm self-employed but not incorporated or registered (no ABN/ACN). I issue invoices for all my jobs. I've tried seeking clarification from the ATO and my super fund without success. If I'm self-employed, what evidence must I provide to the ATO/super fund to contribute to super and claim a tax deduction for concessional contributions? I wish to contribute the $30,000 maximum. Answer: An ATO spokesperson says the work test requires proof of gainful employment for at least 40 hours within 30 consecutive days, as an employee or self-employed, in the financial year of contribution. Australia's tax system relies on self-assessment, assuming your information is accurate. If reviewed and you lack evidence for a deduction, your claim may be disallowed. Keep records of your work hours to demonstrate compliance. You seem on the right track. Getting an ABN might be wise - it's free. It was a quiet Friday - until my inbox exploded. A distressed reader had just seen what she thought was a government announcement: from 1 June 2025, nobody would be allowed to touch their super until age 70. She was shocked and panicky. It was all news to me, so I asked her to send a screenshot. What came back looked highly convincing. It was a professional-looking Apple News article featuring a photo of the prime minister, complete with quotes and policy details. It claimed the preservation age was being lifted to 70 and promised a "work bonus" to soften the blow. I told her it screamed fake news, and I was right. But within hours, dozens more emails flooded in from readers who had seen the same article and were equally alarmed. That's when I called the Tax Office. They confirmed what I suspected: it was total rubbish. We immediately issued a special bulletin to all my news subscribers to warn them it was a fake. This is AI and social media being weaponised. A few clicks, and boom - scammers whip up a fake news release so real it fools half the country. They blast it out on email or Facebook, and their goal's dead simple: get you to click. One wrong move, and your device is toast, your data's swiped, or your identity's gone. These scams aren't just dodgy texts anymore: they're polished, gut-punching lies built to spark fear and chaos. And when it comes to superannuation - one of your most important assets - the stakes are high. Let's be absolutely clear: any major changes to superannuation rules, such as lifting the preservation age, would be front-page news. They'd be announced through formal channels, usually as part of the Federal Budget, and covered extensively in mainstream media. If you haven't seen it on the evening news or read it in a major newspaper, chances are it isn't real. Here are the facts. The preservation age is currently 60, and there are no plans to increase it. Once you reach preservation age, you can access your super if you meet a "condition of release". That typically means retiring or ceasing employment - though it doesn't have to be from your main job. Even resigning from a casual job may be enough. And if you're 60 or older and can't satisfy a condition of release, you can start a transition-to-retirement (TTR) pension, which allows you to draw up to 10 per cent of your super annually, even while still working. It's a useful strategy for those wanting to cut back their hours without sacrificing income. From age 65, you can access your super regardless of your work status. For people on temporary visas, the Departing Australia Superannuation Payment (DASP) scheme allows you to withdraw your super once you've left the country permanently. In limited cases, you can access super before preservation age: for example, if you're permanently incapacitated, terminally ill, suffering severe financial hardship, or facing large medical bills. Each situation has strict eligibility rules and requires approval from the ATO or your super fund. Super is a long-term investment. But it's also a tempting target for scammers, because it's where most Australians keep a large chunk of their retirement wealth. That's why you need to stay vigilant, question what you see online, and never act on anonymous messages without checking first. If something sounds extreme or sudden - like moving the preservation age to 70 overnight - don't panic. Don't click. Don't forward it. Just check with a reputable source like your fund, a licensed adviser, or government websites. A moment of doubt can save you a lifetime of trouble. Question: We own our own home valued at around $1,300,000 although we have an investment loan against the home equity, of $400,000. I have not paid this out as my investment return has to date exceeded the interest payable on the interest only loan. Does Centrelink deduct the value of the investment loan when calculating asset value to determine eligibility? Answer: It depends on how the loan is secured. If the mortgage is over your residence, the loan will not be deducted from the asset value - but if the loan is secured over the investment itself Centrelink will reduce the investment asset by the amount of that loan. Question: How will my superannuation be taxed when it passes to my daughters after my death? It is in pension mode, and all withdrawals are tax-free. When my daughters inherit their equal shares, will they be required to pay tax, or does its tax-free status continue? If tax is payable, would it be more beneficial to name my wife as the beneficiary so she can later transfer the funds to them? What effect would this have on her pension? Answer: If you pass away while in pension phase, your super pension will cease, and your daughters can only receive the remaining balance as a lump sum. Whilst withdrawals you make are tax-free, the taxable proportion of lump sum death benefits paid to your daughters (non-tax dependants) will be subject to tax at 15% plus 2% Medicare Levy. If you changed the beneficiaries from your daughters to your wife, then she can receive a tax-free lump sum death benefit. However, the amount received by your wife will be assessed as an asset by Centrelink and assuming she keeps the funds in the bank account, deemed income will count under the income test. This may affect her age pension. Furthermore, if she then gifted this amount to your daughters, Centrelink will treat the amount gifted, less the first $10,000, as a 'deprived' asset, and count it under the means tests for 5 years. This is a complex issue and expert advice is essential. Question: I am 67 and retired from my banking career after 48 years. I now do handyman work to stay active, which I enjoy. It's not full-time - about 10 hours per week. I also spend 10 hours weekly at a paid woodworking course. I'm self-employed but not incorporated or registered (no ABN/ACN). I issue invoices for all my jobs. I've tried seeking clarification from the ATO and my super fund without success. If I'm self-employed, what evidence must I provide to the ATO/super fund to contribute to super and claim a tax deduction for concessional contributions? I wish to contribute the $30,000 maximum. Answer: An ATO spokesperson says the work test requires proof of gainful employment for at least 40 hours within 30 consecutive days, as an employee or self-employed, in the financial year of contribution. Australia's tax system relies on self-assessment, assuming your information is accurate. If reviewed and you lack evidence for a deduction, your claim may be disallowed. Keep records of your work hours to demonstrate compliance. You seem on the right track. Getting an ABN might be wise - it's free.
The Advertiser
23-05-2025
- Business
- The Advertiser
Why you shouldn't be scared of these super changes
The election might be over, but the next big scare campaign is just getting started. The subject this time is the Albanese government's planned changes to taxes on superannuation. There seems to be an endless supply of news articles on this topic, ranging from concerned tutting to full-blown doomsaying and accusations of class war. Almost all this coverage misses the mark; these changes, while modest, are an important first step in reforming Australia's broken and unequal superannuation system. So, what's changing? Currently, most people get a tax concession on their superannuation earnings (the money made by your super investments). Rather than being taxed at your marginal tax rate, the money made from your super investments is only taxed at 15 per cent. That is a lot less than the top income tax rate of 45 per cent (plus the Medicare levy). But the government is proposing to raise the tax on superannuation balances of over $3 million. These people will pay an additional 15 per cent on earnings. Importantly though, it is only on the amount above $3 million. For instance, if you have $4 million in super, you will only pay additional tax on a quarter of your earnings. The tax is projected to raise $2.3 billion in its first full year, and $40 billion over a decade. If $3 million in super sounds like a lot of money; that's because it is. Very few of us have anywhere near that amount of super. According to Treasury, the tax will initially affect 80,000 people or one in 200 (0.5 per cent) super account holders. For comparison, according to the most recent Tax Office data, less than half of people in their 60s have more than $250,000 in super. To be clear, this is a modest change to a broken system. Superannuation tax concessions were originally justified to help people save for a comfortable retirement. But they have become a tax avoidance machine that funnels money to the top and subsidises inheritances for rich families. Tax concessions on superannuation cost the government about $60 billion every year, nearly as much as the Age Pension. They disproportionately benefit high-income earners, with more flowing to the top 10 per cent ($22 billion) than the bottom 70 per cent combined. Crucially, the $2.3 billion raised by this reform is a lot smaller than the $22 billion the top 10% currently receive in tax concessions. Even after the changes, superannuation tax concessions will still disproportionately benefit high-income earners. So, what's all the fuss about? The most common criticism is that the $3 million threshold is not 'indexed' to inflation, and so although only the very, very rich have $3 million in super at the moment, with time it might be a lot more of us. This is greatly overblown; according to Treasury modelling even in 30 years, only the top 10 per cent of taxpayers may have to pay any additional tax at all. Also, a future government can always just raise the bracket if they want to. Income tax brackets are not indexed either, and governments change them regularly. Yet commentators are acting like taxes on super can't ever again be adjusted, with some making claims that the tax will affect many Gen Z people when they retire ... in 40 years! History shows how silly this is. Australia's income tax brackets have changed drastically and frequently in the last 40 years. If Australia had the same tax brackets now as it did 40 years ago, anyone earning over $36,000 a year would be in the top tax bracket of 60 per cent - including anyone in a minimum wage job working full-time, and even some working part-time. If people are truly concerned about this "indexation issue", they could simply support the Greens' amendment to lower the threshold to $2 million and index this amount to inflation. This would still only affect the very rich. According to the most recent Tax Office data, less than one in 100 (0.6 per cent) of super account holders have more than $2 million in superannuation. For those that are truly concerned with the welfare and future of Gen Z, there are better priorities than speculating that in 40 years they maybe ... might ... if you include some questionable assumptions ... pay a bit more tax. For instance, climate change will certainly drastically impact their lives, yet Australia continues to intensify this crisis, continuing to expand fossil fuel projects and spending over $10 billion on fossil fuel subsidies every year. Another issue raising much scaremongering is that the tax will apply to "unrealised capital gains". Capital gains are when the value of an asset (such a property) rises. 'Unrealised' means that the asset hasn't been sold yet. Critics seem to think this is inherently unfair, but unrealised capital gains are a real form of income. For instance, if the value of your assets rises, you can borrow against this value regardless of whether you've sold them yet. Others speculate that this will somehow undermine or crash the economy. Much analysis fails to recognise that Australia already has an effective tax on unrealised capital gains: the asset test on the Age Pension. If the value of your assets rises, the amount of Age Pension you can receive drops; in economic terms, this works the same way as a tax, yet the Australian economy has somehow survived. READ MORE: Lastly, there are concerns that this will harm people with small businesses or farms. This is only true if people are currently holding their business or farm in their super account. Why would people do this? Because the huge tax concessions on superannuation encourages people to pile all their assets into their super account to avoid paying tax. This is not the purpose of superannuation, and definitely not the purpose of the tax concessions. These changes will not fully fix the superannuation system, but nor will they crash the economy, bankrupt Gen Z, or destroy farmers and small business owners. They are, however, an important first step in reducing inequality in Australia. The election might be over, but the next big scare campaign is just getting started. The subject this time is the Albanese government's planned changes to taxes on superannuation. There seems to be an endless supply of news articles on this topic, ranging from concerned tutting to full-blown doomsaying and accusations of class war. Almost all this coverage misses the mark; these changes, while modest, are an important first step in reforming Australia's broken and unequal superannuation system. So, what's changing? Currently, most people get a tax concession on their superannuation earnings (the money made by your super investments). Rather than being taxed at your marginal tax rate, the money made from your super investments is only taxed at 15 per cent. That is a lot less than the top income tax rate of 45 per cent (plus the Medicare levy). But the government is proposing to raise the tax on superannuation balances of over $3 million. These people will pay an additional 15 per cent on earnings. Importantly though, it is only on the amount above $3 million. For instance, if you have $4 million in super, you will only pay additional tax on a quarter of your earnings. The tax is projected to raise $2.3 billion in its first full year, and $40 billion over a decade. If $3 million in super sounds like a lot of money; that's because it is. Very few of us have anywhere near that amount of super. According to Treasury, the tax will initially affect 80,000 people or one in 200 (0.5 per cent) super account holders. For comparison, according to the most recent Tax Office data, less than half of people in their 60s have more than $250,000 in super. To be clear, this is a modest change to a broken system. Superannuation tax concessions were originally justified to help people save for a comfortable retirement. But they have become a tax avoidance machine that funnels money to the top and subsidises inheritances for rich families. Tax concessions on superannuation cost the government about $60 billion every year, nearly as much as the Age Pension. They disproportionately benefit high-income earners, with more flowing to the top 10 per cent ($22 billion) than the bottom 70 per cent combined. Crucially, the $2.3 billion raised by this reform is a lot smaller than the $22 billion the top 10% currently receive in tax concessions. Even after the changes, superannuation tax concessions will still disproportionately benefit high-income earners. So, what's all the fuss about? The most common criticism is that the $3 million threshold is not 'indexed' to inflation, and so although only the very, very rich have $3 million in super at the moment, with time it might be a lot more of us. This is greatly overblown; according to Treasury modelling even in 30 years, only the top 10 per cent of taxpayers may have to pay any additional tax at all. Also, a future government can always just raise the bracket if they want to. Income tax brackets are not indexed either, and governments change them regularly. Yet commentators are acting like taxes on super can't ever again be adjusted, with some making claims that the tax will affect many Gen Z people when they retire ... in 40 years! History shows how silly this is. Australia's income tax brackets have changed drastically and frequently in the last 40 years. If Australia had the same tax brackets now as it did 40 years ago, anyone earning over $36,000 a year would be in the top tax bracket of 60 per cent - including anyone in a minimum wage job working full-time, and even some working part-time. If people are truly concerned about this "indexation issue", they could simply support the Greens' amendment to lower the threshold to $2 million and index this amount to inflation. This would still only affect the very rich. According to the most recent Tax Office data, less than one in 100 (0.6 per cent) of super account holders have more than $2 million in superannuation. For those that are truly concerned with the welfare and future of Gen Z, there are better priorities than speculating that in 40 years they maybe ... might ... if you include some questionable assumptions ... pay a bit more tax. For instance, climate change will certainly drastically impact their lives, yet Australia continues to intensify this crisis, continuing to expand fossil fuel projects and spending over $10 billion on fossil fuel subsidies every year. Another issue raising much scaremongering is that the tax will apply to "unrealised capital gains". Capital gains are when the value of an asset (such a property) rises. 'Unrealised' means that the asset hasn't been sold yet. Critics seem to think this is inherently unfair, but unrealised capital gains are a real form of income. For instance, if the value of your assets rises, you can borrow against this value regardless of whether you've sold them yet. Others speculate that this will somehow undermine or crash the economy. Much analysis fails to recognise that Australia already has an effective tax on unrealised capital gains: the asset test on the Age Pension. If the value of your assets rises, the amount of Age Pension you can receive drops; in economic terms, this works the same way as a tax, yet the Australian economy has somehow survived. READ MORE: Lastly, there are concerns that this will harm people with small businesses or farms. This is only true if people are currently holding their business or farm in their super account. Why would people do this? Because the huge tax concessions on superannuation encourages people to pile all their assets into their super account to avoid paying tax. This is not the purpose of superannuation, and definitely not the purpose of the tax concessions. These changes will not fully fix the superannuation system, but nor will they crash the economy, bankrupt Gen Z, or destroy farmers and small business owners. They are, however, an important first step in reducing inequality in Australia. The election might be over, but the next big scare campaign is just getting started. The subject this time is the Albanese government's planned changes to taxes on superannuation. There seems to be an endless supply of news articles on this topic, ranging from concerned tutting to full-blown doomsaying and accusations of class war. Almost all this coverage misses the mark; these changes, while modest, are an important first step in reforming Australia's broken and unequal superannuation system. So, what's changing? Currently, most people get a tax concession on their superannuation earnings (the money made by your super investments). Rather than being taxed at your marginal tax rate, the money made from your super investments is only taxed at 15 per cent. That is a lot less than the top income tax rate of 45 per cent (plus the Medicare levy). But the government is proposing to raise the tax on superannuation balances of over $3 million. These people will pay an additional 15 per cent on earnings. Importantly though, it is only on the amount above $3 million. For instance, if you have $4 million in super, you will only pay additional tax on a quarter of your earnings. The tax is projected to raise $2.3 billion in its first full year, and $40 billion over a decade. If $3 million in super sounds like a lot of money; that's because it is. Very few of us have anywhere near that amount of super. According to Treasury, the tax will initially affect 80,000 people or one in 200 (0.5 per cent) super account holders. For comparison, according to the most recent Tax Office data, less than half of people in their 60s have more than $250,000 in super. To be clear, this is a modest change to a broken system. Superannuation tax concessions were originally justified to help people save for a comfortable retirement. But they have become a tax avoidance machine that funnels money to the top and subsidises inheritances for rich families. Tax concessions on superannuation cost the government about $60 billion every year, nearly as much as the Age Pension. They disproportionately benefit high-income earners, with more flowing to the top 10 per cent ($22 billion) than the bottom 70 per cent combined. Crucially, the $2.3 billion raised by this reform is a lot smaller than the $22 billion the top 10% currently receive in tax concessions. Even after the changes, superannuation tax concessions will still disproportionately benefit high-income earners. So, what's all the fuss about? The most common criticism is that the $3 million threshold is not 'indexed' to inflation, and so although only the very, very rich have $3 million in super at the moment, with time it might be a lot more of us. This is greatly overblown; according to Treasury modelling even in 30 years, only the top 10 per cent of taxpayers may have to pay any additional tax at all. Also, a future government can always just raise the bracket if they want to. Income tax brackets are not indexed either, and governments change them regularly. Yet commentators are acting like taxes on super can't ever again be adjusted, with some making claims that the tax will affect many Gen Z people when they retire ... in 40 years! History shows how silly this is. Australia's income tax brackets have changed drastically and frequently in the last 40 years. If Australia had the same tax brackets now as it did 40 years ago, anyone earning over $36,000 a year would be in the top tax bracket of 60 per cent - including anyone in a minimum wage job working full-time, and even some working part-time. If people are truly concerned about this "indexation issue", they could simply support the Greens' amendment to lower the threshold to $2 million and index this amount to inflation. This would still only affect the very rich. According to the most recent Tax Office data, less than one in 100 (0.6 per cent) of super account holders have more than $2 million in superannuation. For those that are truly concerned with the welfare and future of Gen Z, there are better priorities than speculating that in 40 years they maybe ... might ... if you include some questionable assumptions ... pay a bit more tax. For instance, climate change will certainly drastically impact their lives, yet Australia continues to intensify this crisis, continuing to expand fossil fuel projects and spending over $10 billion on fossil fuel subsidies every year. Another issue raising much scaremongering is that the tax will apply to "unrealised capital gains". Capital gains are when the value of an asset (such a property) rises. 'Unrealised' means that the asset hasn't been sold yet. Critics seem to think this is inherently unfair, but unrealised capital gains are a real form of income. For instance, if the value of your assets rises, you can borrow against this value regardless of whether you've sold them yet. Others speculate that this will somehow undermine or crash the economy. Much analysis fails to recognise that Australia already has an effective tax on unrealised capital gains: the asset test on the Age Pension. If the value of your assets rises, the amount of Age Pension you can receive drops; in economic terms, this works the same way as a tax, yet the Australian economy has somehow survived. READ MORE: Lastly, there are concerns that this will harm people with small businesses or farms. This is only true if people are currently holding their business or farm in their super account. Why would people do this? Because the huge tax concessions on superannuation encourages people to pile all their assets into their super account to avoid paying tax. This is not the purpose of superannuation, and definitely not the purpose of the tax concessions. These changes will not fully fix the superannuation system, but nor will they crash the economy, bankrupt Gen Z, or destroy farmers and small business owners. They are, however, an important first step in reducing inequality in Australia. The election might be over, but the next big scare campaign is just getting started. The subject this time is the Albanese government's planned changes to taxes on superannuation. There seems to be an endless supply of news articles on this topic, ranging from concerned tutting to full-blown doomsaying and accusations of class war. Almost all this coverage misses the mark; these changes, while modest, are an important first step in reforming Australia's broken and unequal superannuation system. So, what's changing? Currently, most people get a tax concession on their superannuation earnings (the money made by your super investments). Rather than being taxed at your marginal tax rate, the money made from your super investments is only taxed at 15 per cent. That is a lot less than the top income tax rate of 45 per cent (plus the Medicare levy). But the government is proposing to raise the tax on superannuation balances of over $3 million. These people will pay an additional 15 per cent on earnings. Importantly though, it is only on the amount above $3 million. For instance, if you have $4 million in super, you will only pay additional tax on a quarter of your earnings. The tax is projected to raise $2.3 billion in its first full year, and $40 billion over a decade. If $3 million in super sounds like a lot of money; that's because it is. Very few of us have anywhere near that amount of super. According to Treasury, the tax will initially affect 80,000 people or one in 200 (0.5 per cent) super account holders. For comparison, according to the most recent Tax Office data, less than half of people in their 60s have more than $250,000 in super. To be clear, this is a modest change to a broken system. Superannuation tax concessions were originally justified to help people save for a comfortable retirement. But they have become a tax avoidance machine that funnels money to the top and subsidises inheritances for rich families. Tax concessions on superannuation cost the government about $60 billion every year, nearly as much as the Age Pension. They disproportionately benefit high-income earners, with more flowing to the top 10 per cent ($22 billion) than the bottom 70 per cent combined. Crucially, the $2.3 billion raised by this reform is a lot smaller than the $22 billion the top 10% currently receive in tax concessions. Even after the changes, superannuation tax concessions will still disproportionately benefit high-income earners. So, what's all the fuss about? The most common criticism is that the $3 million threshold is not 'indexed' to inflation, and so although only the very, very rich have $3 million in super at the moment, with time it might be a lot more of us. This is greatly overblown; according to Treasury modelling even in 30 years, only the top 10 per cent of taxpayers may have to pay any additional tax at all. Also, a future government can always just raise the bracket if they want to. Income tax brackets are not indexed either, and governments change them regularly. Yet commentators are acting like taxes on super can't ever again be adjusted, with some making claims that the tax will affect many Gen Z people when they retire ... in 40 years! History shows how silly this is. Australia's income tax brackets have changed drastically and frequently in the last 40 years. If Australia had the same tax brackets now as it did 40 years ago, anyone earning over $36,000 a year would be in the top tax bracket of 60 per cent - including anyone in a minimum wage job working full-time, and even some working part-time. If people are truly concerned about this "indexation issue", they could simply support the Greens' amendment to lower the threshold to $2 million and index this amount to inflation. This would still only affect the very rich. According to the most recent Tax Office data, less than one in 100 (0.6 per cent) of super account holders have more than $2 million in superannuation. For those that are truly concerned with the welfare and future of Gen Z, there are better priorities than speculating that in 40 years they maybe ... might ... if you include some questionable assumptions ... pay a bit more tax. For instance, climate change will certainly drastically impact their lives, yet Australia continues to intensify this crisis, continuing to expand fossil fuel projects and spending over $10 billion on fossil fuel subsidies every year. Another issue raising much scaremongering is that the tax will apply to "unrealised capital gains". Capital gains are when the value of an asset (such a property) rises. 'Unrealised' means that the asset hasn't been sold yet. Critics seem to think this is inherently unfair, but unrealised capital gains are a real form of income. For instance, if the value of your assets rises, you can borrow against this value regardless of whether you've sold them yet. Others speculate that this will somehow undermine or crash the economy. Much analysis fails to recognise that Australia already has an effective tax on unrealised capital gains: the asset test on the Age Pension. If the value of your assets rises, the amount of Age Pension you can receive drops; in economic terms, this works the same way as a tax, yet the Australian economy has somehow survived. READ MORE: Lastly, there are concerns that this will harm people with small businesses or farms. This is only true if people are currently holding their business or farm in their super account. Why would people do this? Because the huge tax concessions on superannuation encourages people to pile all their assets into their super account to avoid paying tax. This is not the purpose of superannuation, and definitely not the purpose of the tax concessions. These changes will not fully fix the superannuation system, but nor will they crash the economy, bankrupt Gen Z, or destroy farmers and small business owners. They are, however, an important first step in reducing inequality in Australia.
Sydney Morning Herald
19-05-2025
- Business
- Sydney Morning Herald
What you need to earn to be in the top 1 per cent in your Perth suburb
The top 1 per cent of income earners in a ring of Perth waterside suburbs take home more than $2 million a year on average, while in another dozen neighbourhoods across the city the best-paid 1 per cent make more than $1 million. Analysis of official personal income data by this masthead has revealed a cluster of ultra-high earners in Perth's wealthy western suburbs. Topping the list was Cottesloe where the highest paid 1 per cent had an average annual income of $16.1 million, the highest in Australia. The 1 per cent in the adjacent neighbourhood of Mosman Park-Peppermint Grove was next with an average annual income of $4.3 million. Third was the 1 per cent living in Nedlands-Dalkeith-Crawley with $3.9 million. Across the whole of Greater Perth, the average income of the top 1 per cent was $811,000 in 2021-22. That compares with an average annual income for all earners in the city of $79,500; the median income (the middle value of all earners) was $60,360. The analysis used Australian Bureau of Statistics personal income figures, which draws on Tax Office records for the 2021-22 financial year, the most recent available. The data only covers individual pre-tax income; it does not include assets owned by individuals such as housing and shares. Suburbs where the top 1 per cent have especially high incomes correlate closely with house prices. Cottesloe had the city's second-highest median house price of $3.2 million in Domain's latest House Price Report. The Dalkeith area, which was second on the 1 per cent income list, had the highest median house price at $3.3 million. While suburbs with the highest average incomes for the top 1 per cent were mostly near the Swan River and along the coast, one was located in the Perth Hills with Gidgegannup sitting at $1.3 million. Strategic Property Group managing director Trent Fleskens said the figures showed just how concentrated wealth was in the western suburbs and added high incomes in these pockets were subsequently driving up local property prices.
The Age
19-05-2025
- Business
- The Age
What you need to earn to be in the top 1 per cent in your Perth suburb
The top 1 per cent of income earners in a ring of Perth waterside suburbs take home more than $2 million a year on average, while in another dozen neighbourhoods across the city the best-paid 1 per cent make more than $1 million. Analysis of official personal income data by this masthead has revealed a cluster of ultra-high earners in Perth's wealthy western suburbs. Topping the list was Cottesloe where the highest paid 1 per cent had an average annual income of $16.1 million, the highest in Australia. The 1 per cent in the adjacent neighbourhood of Mosman Park-Peppermint Grove was next with an average annual income of $4.3 million. Third was the 1 per cent living in Nedlands-Dalkeith-Crawley with $3.9 million. Across the whole of Greater Perth, the average income of the top 1 per cent was $811,000 in 2021-22. That compares with an average annual income for all earners in the city of $79,500; the median income (the middle value of all earners) was $60,360. The analysis used Australian Bureau of Statistics personal income figures, which draws on Tax Office records for the 2021-22 financial year, the most recent available. The data only covers individual pre-tax income; it does not include assets owned by individuals such as housing and shares. Suburbs where the top 1 per cent have especially high incomes correlate closely with house prices. Cottesloe had the city's second-highest median house price of $3.2 million in Domain's latest House Price Report. The Dalkeith area, which was second on the 1 per cent income list, had the highest median house price at $3.3 million. While suburbs with the highest average incomes for the top 1 per cent were mostly near the Swan River and along the coast, one was located in the Perth Hills with Gidgegannup sitting at $1.3 million. Strategic Property Group managing director Trent Fleskens said the figures showed just how concentrated wealth was in the western suburbs and added high incomes in these pockets were subsequently driving up local property prices.
The Age
07-05-2025
- Business
- The Age
Sprung! The wildest claims people have made on their tax returns
Australians have been warned against exaggerating their work-related expenses as the Australian Taxation Office reveals some of the worst offenders, including a truck driver who claimed their swimwear to take a dip on a hot day. On Wednesday, the Tax Office picked out three 'wild' and 'outrageous' examples out of the millions of tax returns it sorted through last year. 'Spoiler alert,' it said, 'an air fryer generally won't make the cut.' Turns out, there was a mechanic who tried to claim a series of household goods: an air fryer, microwave, two vacuum cleaners, a television, gaming console and gaming accessories as work-related. The ATO denied these expenses, saying they were 'personal in nature'. A truck driver was also denied their claim after they tried to claim swimwear as a work expense because it was hot where they stopped in transit, and they wanted to go for a swim. ATO assistant commissioner Rob Thomson said while some people tried their luck with 'unusual' work-related deduction claims, they needed to meet strict criteria. Exaggerated deduction attempts would not be tolerated. Loading 'While a lunchtime dip might clear your head for work, swimwear for a truck driver is clearly not deductible,' he said. 'If your deductions don't pass the 'pub test', it's highly unlikely your claim would meet the ATO's strict criteria.' Thomson said exaggerated or mistaken claims could be picked up through the ATO's data and analytics, and that penalties could apply in some cases. 'Where something doesn't look right, the ATO will get in contact with you to be able to show that you've got records to substantiate your claim, and also explain why that claim relates to your work income,' he said. 'The penalty can depend on whether we think someone has made a mistake, or if they're just being reckless or disregarding the law.'
